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US Has Been In Recession Since December 2007
The National Bureau of Economic Research said Monday that the US has been in a recession since December 2007. The NBER is a private, nonprofit research organization of academic economists who determine business cycles. The stock market took a dip on the news that reached double-digit percentages for some tech stocks.
A long-standing rule of thumb for "recession" is that it is defined as contraction in the GDP for at least two consecutive quarters (six months).
More info.
By that long-accepted definition of recession, the US is not even yet in a recession. The US GDP decreased for the first time in recent history only in the third (most recent) quarter, by 0.3%. In the second quarter -- earlier this year -- real GDP increased 2.8%.
But how long has the media been ceaselessly hammering it into our heads that we're in a recession, tolling the bells of doom and gloom? How many times have we heard the phrase, "In these tough economic times" inserted into nearly everything we see or hear? How long has the drumbeat of the "recession" been played, when we had nothing but positive growth reports, even in the midst of the sub-prime crisis?
Worse still, many people actually believe that whatever recession we'll end up having is exclusively the fault of only the current President, and can't look back to anything before the year 2000 for any blame whatsoever. The egregious irresponsibility of the sub-prime lending has a long and sordid history.
It is this kind of partisan willful ignorance on the part of many that has enabled the political agenda among some to drive the notion that the US is in a severe recession caused by the ineptness and reckless irresponsibility of the Bush administration, when the US had nothing but growth in the GDP until only a month ago. If you asked most people how long they thought the economy had been shrinking for negative, they'd probably say things like, "A year? Two years?"
Wrong.
Last quarter. And we just found out about it.
So we've heard talk, day after day, night after night, an incessant drilling into our heads that we're in a deep and severe recession -- one that may even now rival the Great Depression! -- creating panic and fear, causing people to pull investments and hold onto their wallets, change purchasing plans, in turn creating bleak forecasts for manufacturers and other business, which causes job loss, and then -- voilà!:
Is it any surprise we're going to have a recession on our hands?
Capitalistic systems only work when the participants have faith in the system -- when that faith collapses, for whatever reason, you get a recession. And that's a normal and accepted part of the cycle.
Monkeying with the key metrics -- like "unemployment" (ignoring those no longer actively seeking work)
Huh? Are you claiming we should count housewives as unemployed? Being unemployed is only a problem for those that would otherwise work.. but there are plenty of people that AREN'T going to be working. How exactly does including those people help us figure out how much untapped talent we have?
"Housewives"? Are you seriously suggesting that "housewives" make up a significant demographic group outside the 1950s or TV series fantasy? It has been a long time since only one income could reliably support middle class subsistence. Certainly there are plenty of people who aren't going to be working, but that is more a product of malinvestment than the few people who realistically have a choice to not work.
Seastead this.
They do stuff like classify making hamburgers as *manufacturing* now. If you went back and relooked at the economy with the older metrics, it has been a recession for well over a year. Plus, no one outside the Fed has the real numbers on inflation, they stopped publishing the full M3. That was a serious red flag indicating "lookout, shenanigans ahead!" for anyone paying attention. A couple of websites try to guess at the real numbers and according to their analysis it is a lot higher than what the official stats say. And then all you have to do is pay attention to your own budget and look at prices, taking into consideration such things as package weight shrinkage at the grocery store. You may be paying near the same price for product x over the past year but a LOT of stuff is now sold smaller weight for the same appearing package. For instance (just one of many) I noticed my large standard bags of catfood remained at the regular price, but dropped two lbs in weight. And look at the huge fuel price runup tis summer, that was a lot of extra cash that disappeared mostly down the speculator/investment bank rabbit hole, some analyssts think just goldman sachs was responsible for at least one dollar of those higher gas at the pump prices. then all the commodities jumps as the mortgage loons switched to that, they have bankrupted huge segments of the ag industry over that, just yesterday the largest poultry operation went chapter 11, they got stuck with being forced to pay the speculator driven huge price increases for corn (and no it wasn't all for ethanol demand, it was speculator driven). Now look at how they keep cooking the books on the real unemployment figures, they just stopped counting people who have gone a long time without work! Just not included!
If anything, the true damage to the economy is still being lowballed, the sheer outright thievery that has gone on at the upper levels of the "bailout zone" is off the scale.
This article from 2004 indicates there are about 9.8m stay-at-home moms and dads. This does not appear to count households without children and a stay-at-home spouse. While not a large group, it is still a significant number that could screw up unemployment statistics.
I'm trying to find a polite way to say this.
1. You just put a lot of words somebody didn't speak into their mouth, then debated that straw-man and not what they said. Frankly, you owe Baldrson (78598) an apology.
2. The old metrics have been changed to deliberately lie to the general public. That's a fact, both that the rules the government uses to define 'unemployment', 'cost of living', 'inflation' and other factors have all been changed, and that the intent was to mislead people. (To verify the second point, you need merely note that the use of the M3 was dropped entirely, but if that's not enough for you, there's the section in the IRS code where 'a well trained and educated workforce' is now listed as a form of intellectual property subject to capitalization or amortization right alongside patents and copyrights - that's right, if you are an employee, you now can be sold or written off (at least as the IRS sees it), and your estimated value to the company (different from what you actually get paid) is included in their stock valuation. If that's not a deliberate lie to prop up stock prices, what is it, a full revocation of the 14th amendment?
3. The old metric for unemployment didn't deliberately count 'housewives'. What it did count was people who had stopped contacting official government unemployment offices, (presumably because they weren't getting any help there), but weren't showing up on the official employment rolls (because if they were, they'd be having income tax and social security withholding, so we'd know they weren't unemployed) and so were working under the table, usually for less than minimum wage, or as migrant workers, or squatting (where they were farming the land they didn't own, not just living on it).
The old metric tried to take these into account, which often took some judgment calls, and some politicians argued that the methods of deciding who would work if a legal job was offered and who wouldn't really work anyway were flawed. Some of them even argued that we would end up counting a few women who dropped out just because they got married (housewives!). Maybe, but the number of people who would work legally and yet don't see any point in asking at the government office after twenty weeks of being told there's nothing available is certainly greater than zero, which is how it's counted now. There's something very crooked involved in saying 'We don't have a completely accurate number, so we're going to count the whole thing as zero. There - problem is gone, there are no unemployed (or homeless, or people without medical care, etc.) in America", and similar tricks.
Who is John Cabal?
...and they are *all* 100% correct.
A recession is two consecutive negative growth quarters in terms of GDP.
This hasn't happened yet.
The quarter before last our GDP rose. This last quarter was the first quarter it fell...by a marginal .3%.
That's one quarter. Do the math. of course, you'd rather we re-write the definition instead of calling it what it is, right? "Tough economic times" hardly generates the fear and uncertainty that "RECESSION" causes, right? ...and without FEAR and UNCERTAINTY...how can we drive the population into a frothing mob demanding "change" in regards to that which they know next to *nothing* (other than what we've told them..RECESSION!) about.
How very cute...
"Monkeying with the key metrics -- like "unemployment" (ignoring those no longer actively seeking work) and "cost of living" under continual "revision" for political purposes since at least 1983 (when "cost of living" replaced house prices with "imputed rent") -- has left us without the information we need to realistically address economic policy.
It's sort of like a junkie being asked diagnostic questions like
"Where does it hurt?" by a doctor who is prescribing him opiates."
You hit the nail on the head.
Manipulating economic stats has become a new art form.
For a dose of reality go to this web site.
Some of us saw this coming a long time ago. How to Fake Unemployment Numbers..
GDP has similar faults, like firing US workers, and importing more foreign goods increases US GDP !!
There is an alternate way of measuring GDP, (total US wages and salaries paid), but reporting that number (~6.85T$ in 2008 dollars) would crush the life out of the Markets.
For much of the 90's and 00's both the markets and the world economy have been living in a fantasy land.
Gold only has the value that other people think it has.
While that is true, the real argument for the gold standard is its fairly constant and predictably increasing supply. All the gold that will ever exist on earth is already here, and we find a little more every year. The main difference is that the government can't just make more gold when politically expedient, like they can with paper money. However, that's also its largest negative according to most economists. The current bailouts would be impossible with gold coins.
... and that's when the C.H.U.D.'s came at me.
A recession is two consecutive negative growth quarters in terms of GDP.
Let me just quote wikipedia for you here.
A recession is a contraction phase of the business cycle, or "a period of reduced economic activity....Some business & investment glossaries add to the general definition a rule of thumb that recessions are often indicated by two consecutive quarters of negative growth (or contraction) of gross domestic product (GDP)
You know what a rule of thumb is right? It's not a law handed down by God, but a rough guide. This is economics, not science. Even if you were to abide strictly by the 2 quarters definition, I bet you couldn't give me a reason why it's 2 quarters and not 3 or 1.
I came here for a good argument
Of course, the real meaning has never been "Christmas was the Christ's birthday". Christmas is a celebration of His birth, but was never intended to celebrate the anniversary of His birth.
"God rest ye merry gentlemen, let nothing you dismay. Remember Christ our Savior was born on Christmas day. To save us all from Satan's power when we were gone astray."
You were saying?
"...always new atoms but always doing the same dance, remembering what the dance was yesterday." -Richard Feynman
According to the CIA World Factbook entry on the United States, the total population of people 15+ in the states is 242,677,893. Let's assume for the sake of discussion that each and every one of these people had a job and was eligible for an even cut of the $700bn dollars. That would work out to only $2,884.48, give or take a few cents for postmarking the checks. What's that, one or two mortgage payments? Maybe 2-3 months rent?
Random Thoughts From A Diseased Mind (Not For Dummies)
Yeah, there is a real meaning behind "Christmas": the entire population of the temperate Northern Hemisphere deluding themselves into thinking that cold and lack of daylight are somehow jolly!
In case nobody's told you, your savior was born in April or May.
Christmas is the day of the Mass of Christ, not Jesus's birthday. The Catholic Church chose the day to coincide with an existing holy period in pagan Europe, since people were already in the habit of celebrating that week. Nobody knows (or particularly cares) what the exact date was. Christian scriptures only hint at the year by recording stuff like who was king at the time.
Information wants to be anthropomorphized.
That's not deflation. The fact you believe it is suggests to me that you don't really know what you're talking about.
Deflation is the increase in value of an individual unit of currency, *not* a decrease of the purchase price of goods. The latter is simply a secondary effect resulting from the former.
An increase in the value of currency is bad over the long term because:
1) It encourages investors to invest in currency instead of things that generate economic growth (homes, small businesses, etc).
2) It hurts borrowers because the amount of debt for a given loan *increases* during deflation, as the value of an individual dollar goes up, while the absolute value, in terms of units of currency, of loans remain fixed. This discourages leveraging, which, in proper ratios, is a very good thing for the economy (think home and small business loans).
3) Wage inelasticity means that employers are harmed because they cannot reduce wages to compensate for deflation (people don't like seeing their wages go down), while being forced to reduce the price of their goods or services.
I'm sure there are many other issues, but these are just the first couple that come to mind.
Prior to 1980, estimates of unemployment in the USA were developed from broadly based assessments, including reports of agencies that were running soup kitchens, developing census data, doing public health work, and so on. In the Reagan years, the procedure was tightened up: only those people who were demanding Unemployment Insurance benefits were counted as unemployed-- which was justified as being more accurate, but was actually adopted because it made for much better looking statistics. Persons who had exhausted their UI or who never filed for it (because they knew they would not qualify for one reason or another, or the amount they would receive was too little to make the hassle worthwhile) were no longer considered to be unemployed since they were not "looking for work". Among others, this included a huge number of Vietnam vets who were homeless and jobless because their untreated PTSD left them fit for little more than collecting bottles for the refunds.
Currently, Federal USA unemployment estimates drop when people find work, but they also drop when people have been unable to find work before their UI expires, or who have to move to a different state and find the problems of re-applying for UI benefits to be insurmountable, and so on. Another instance: suppose you voluntarily leave a job where you had only earned four day's pay in the last month because they kept calling you to stay home without pay... you left voluntarily, so you don't qualify for UI. Suppose management decides to downsize your department by making conditions so unbearable (sexist, racist, religious persecution, what have you) that half the staff quits. These are voluntary exits, so nobody qualifies for UI (and the employer isn't dinged about it). Yeah, such persecution is illegal... but considering the length and cost of successfully pressing a case, the employer can be pretty damn certain that he can get away with all but the most egregious malbehavior.
There is currently no way to estimate the size of the unemployment problem in the USA. It is larger than the figures the government releases, but we don't know how much larger. Just like we don't have any idea how many people are homeless... nobody is counting such things any more. We might be sitting on a powder keg of civil unrest like the conditions in the black ghettos in the mid 1960s-- we just don't know.
If the dollar was backed by gold, we would not NEED "faith" in America or the American economy.
Right. The value of the dollar would then be backed by the limited and fairly stable supply of gold. They're not making any more of it. And that would work fine if the economy was a static and unchanging system. Price levels would remain constant.
But, the economy is not static or unchanging. New products are constantly coming to market, increasing our standard of living, and generally making life more pleasant and productive. Each year there are more and more new products. Just look at the average kitchen today versus one from the 1960's.
The problem with a static money supply is that the same amount of dollars are chasing an ever increasing supply of goods. Econ 101 says, through supply and demand, that the price of all those goods (including stocks, real-estate and other investments) will fall. So, over time, because of the falling prices of everything, the best investment is to simply hide your gold under your mattress, confident that tomorrow you'll be able to buy more with it than you were today. Deflation
Without that money in circulation, in investments or spent, it becomes impossible for businesses to raise money for future investments, governments collect less tax, and the economy stagnates. The current monetary policy is not the best. But, a strict gold standard would be even worse.
... and that's when the C.H.U.D.'s came at me.
Bah. Your numbers are wacked. Defense spending is 20% of the federal budget. Medicare/Medicaid/Social Security take up over 40% of the budget.
http://en.wikipedia.org/wiki/United_States_federal_budget
How much did 9/11 cost this country? Hundreds of billions. Bush prevented another attack during his Administration against all odds. Biden predicted there will be another attack if Barry would get elected to President. How much do you think that will cost us?
War costs will continue since Barry will be moving troops from Iraq to Afghanistan/Pakistan.
Your Democratic Congress has approved bailouts since coming into power that have eclipsed the war costs.
So, how's that Democratic Congress for the last 2 years been working out for you?
And, maybe you can explain why the most liberal states (which have no war costs) are having the most trouble with their budgets?